With the recent release of the Australian National Outlook 2019 finding that Australia is at risk of falling into a ‘Slow Decline’ by 2060, the impetus for emerging technology adoption and the creation of an AgTech ecosystem have never been so vital.
Although the report doesn’t provide specific policy recommendations it contrasts Australia’s future under two scenarios, Slow Decline and Outlook Vision. Slow Decline depicts Australia’s future if we were to continue business as usual while the Outlook Vision shows a more promising future if decisive actions with a long term view are adopted nationally.
The report identifies five major shifts that Australia must adopt in order to overcome the myriad of social, economic and environmental challenges we face and to propel us toward an Outlook Vision. In a Slow Decline scenario GDP grows at 2.1% annually with returns to landholders increasing by $18B between 2016–2060 in contrast to an Outlook Vision where GDP grows by 2.75–2.8% and returns to landholders increase by $42–84 billion between 2016–2060.
Of particular significance to our agricultural and technology industries is the emphasis on the need for both an ‘industry shift’ and a ‘land shift’. While an industry shift is aimed at bolstering productivity in high growth domestic and export markets and value chains by fostering an increase in technology adoption, a shift in land use is set to produce sustainable and profitable food sources with vast opportunities for carbon sequestration. Such a shift could see Australia reaching ‘net zero’ greenhouse gas emissions by 2050.
With a goal of increasing agricultural productivity to 3% per year (in contrast to the Slow Decline estimate of 1.25% per annum) realising the Outlook Vision could double revenue for commodities such as winter cereals by 2060. To reach this vision we need to embrace the productivity gains the digital economy has to offer. While these gains are not yet fully visible, true value will be realised when emerging technologies move from an installation phase to a deployment phase with widespread adoption by industry participants.
It is undeniable that Australia needs to start adopting technologies at a faster rate than it has previously. The report highlights that “the rate of broad technology adoption is the most important differentiator between national economic performances, and has been shown to account for at least one-quarter of real per capita income growth.” While Australia invests around A$1.8 billion in agricultural R&D annually with an annual AgTech investment of around $3 million ($0.12 per capita) this is still not enough, particularly when compared to our U.S. and Israeli counterparts. In the US, venture capital Agtech investment is around $1.87B annually ($5.80 per capita) which is 50 times more than in Australia, and Israeli AgTech investment is around $52M ($6.05 per capita) annually.
The good news is that Australia is emerging as a hub for the next generation of technologies dubbed ‘Agriculture 4.0’ that are ripe to revolutionise agriculture and food supply chains according to Austrade. With Australia’s population set to reach 41 million by 2060, the National Farmers’ Federation aims to increase Australia’s agricultural output to A$100 billion by 2030.
In order to reach this target and overcome issues such as food fraud, which is estimated to cost the global food industry a staggering US $30–40 billion annually, it is paramount that we see rapid encouragement and investment in emerging technologies such as IoT sensors, blockchain and post farm-gate technologies which digitise, connect and secure agri-supply chains. It is only with such technologies, in conjunction with flexible finance and insurance solutions, that the challenges in our agri-supply chains can be overcome.
Key to increasing tech adoption is building and implementing an AgTech ecosystem which aims to understand and remove barriers to widespread adoption. Food Agility, in partnership with Lauren Richards at RMIT, has conducted research which highlights how “inflexible, complex and un-trialable technologies tend to put farmers off” when it comes to adopting new technologies. When designing technologies for the agriculture sector we need to “ensure that both the technologies and their implementation pathways are agile.”
It is no secret that costly, complex and timely change management exercises exacerbate existing reluctance to shift practices and foster both a lack of trust in tech solutions and their providers. This reluctance is usually due to data security concerns, a lack of access to tech support services and the long lead times for R.O.I, being longer than a single harvest particularly during times of drought.
To overcome such concerns AgTechs must ensure that we are not designing bespoke solutions for industry. Rather, we must foster a culture of collaboration and trust where solutions are developed and provided to industry as integrated solutions so that participants don’t need to independently operate multiple applications simultaneously to manage their operations and leverage available tech for their businesses.
In order to encourage widespread tech adoption it is AgriDigital’s mission to identify and connect with key participants in the AgTech landscape, to build out an AgTech ecosystem that enables simple, easy and secure supply chains.
We are working with industry partners to continue to gain insights into how farmers, traders and commodity handlers interact with, and adopt agtech solutions so that we can fully understand how to overcome barriers to adoption and streamline change management practices. With our rollout in North America underway this year AgriDigital strives to be a leader in global AgTech solutions.